Here we are, fair reader! You’ve reached the very last chapter of the Complete Guide to Rollovers for Business Start-ups.
The Six Most Frequently Asked Questions About ROBS
You’re now very familiar with each of the topics covered below, but feel free to come back here for a quick refresher whenever you’d like.
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Not at all! The Employee Retirement Income Security Act (ERISA) works in conjunction with sections of the Internal Revenue Code to make Rollovers for Business Start-ups a perfectly legal, IRS-acknowledged form of utilizing your retirement funds.
What types of business can I fund with ROBS?
With ROBS, the world is your business oyster. You can start a business from scratch, purchase an existing business, open a new franchise location or even buy an existing franchise location. The only exceptions are businesses deemed to be “solely the investment of capital” (think factoring or loaning your retirement funds to others).
What is the max employee deferral contribution I can make to my new 401(k) plan?
The current maximum annual contribution is $18,000, though it fluctuates from year-to-year. If you are over 50, you’re allowed an additional $6,000 “catch-up” contribution.
Is ROBS legal?
Yes, ROBS is legal. Check out Chapter 1 for a deep dive into the structure and history of ROBS.
Can I pay myself a salary while working for my new company?
You sure can! In fact, it’s encouraged: when you earn a salary, you can then commit a percentage of that back to your retirement fund. Keep in mind that the salary you pay yourself needs to fall within reasonable bounds: if your company’s annual revenue is $100,000, a salary of $200,000 likely falls outside of the “reasonable” requirement.